Honda Motor Co. updated its forecast for its full fiscal year ending March 31, 2013, to reflect a slight reduction in its expected net income. Honda now expects to post JPY370 billion ($4.1 billion) in net income for its full fiscal year, instead of the previous forecast of JPY375 billion, the carmaker said in a statement.
Honda maintained its forecasts for operating profit and revenue, but cut its expectations for global deliveries from 4.12 million vehicles to 4.06 million units. According to Honda, it posted a 62-percent jump in net profit for October-December 2012 to JPY77.4 billion ($849.94 million) from JPY47.7 billion it logged in the same period in 2011. The carmaker’s sales took a deep hit in 2011 from disrupted supply chains after flood damaged Honda and its supplier’s plant in Thailand.
Despite being able to recover from the inventory problems in 2011, Honda booked lower sales in China in the October-December period following a territorial row between the country and Japan, resulting in a nation-wide boycott of its products. However, Honda has disclosed that vehicle production at all its five factories in China has resumed to double shifts as anti-Japan attitude in the country slowly diminish.
According to Fumihiko Ike, Honda Chief Financial Officer, the carmaker’s sales slump in China was more than expected while the market situation in Europe is "very tough." Honda also cut its sales forecast in Europe for its full fiscal year to 185,000 units, from the previous 205,000 vehicles. As for its operations in the United States, Honda executive vice president Tetsuo Iwamura said that they expect to surpass its record sales of 1.55 million units achieved in 2007.